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Friday, May 30, 2008

The FT blogs that various cities around Europe are vying to host the European Institute of Technology (EIT).

The EIT is a good example of how the EU is not just the sum of its intergovernmental parts.

The motivation is one thing. As the various Governments pointed out when Barroso first proposed it, the EU already has some perfectly good universities - why not concentrate on improving them?

But the EIT is not really about technology at all. The point is really all about trying to mirror the United States, and create a common identity - "a European equivalent of MIT", as it is always described.

Having failed to stop it going ahead in the first place, the UK bleated on and on about how the EIT had to be a virtual network, rather than a physical institute in a particular place. But this was missing the point - the whole point is to have a physical institute with a little EU flag on top.

Now all that remains is a battle over the location. In recent years, as the number of EU agencies has proliferated, member states have been furiously trying to grab as much EU spending as possible - from the "Food Safety Agency" to the "European Institute for Gender Equality", pretty much everyone has a slice of the cake. For instance:

* Office for Harmonisation in the Internal Market – Trade Marks and Designs (OHIM) * European Agency for Safety and Health at Work (OSHA) * European Joint Undertaking for ITER and the Development of Fusion Energy (Fusion for Energy) * European Union Satellite Centre (EUSC)

Sweden

* European Centre for Disease Prevention and Control (ECDC)

United Kingdom

* European Medicines Agency (EMEA) * European Police College (CEPOL)

Quite what the point of all these institutes is another question... still, it all helps "build" Europe. Doubtless in a few years time the Foreign Office will be saying that they were in favour of it all along, and that it is further proof that "Europe is reforming and coming our way" (as it always supposedly is).

Friday, May 23, 2008

“Experience has further shown that European Union citizens are not sufficiently aware of the role played by the Community in the school milk scheme. As a result, it should be laid down that the European Union flag must appear on the packaging. In cases where the method of distribution or substantial technical difficulties do not allow the use of individual packaging and appropriate labelling, the fact that the school milk scheme is subsidised by the European Community should be indicated in the form of a clearly visible and readable poster or sign put next to the place of distribution.”

Tuesday, May 20, 2008

According to the Press AssociationMEPs have today voted to increase the amount of subsidies you and me pay each year to "hard-pressed" tobacco farmers. As the global credit crunch starts to bite and rising food and petrol prices hit your daily budget I'm sure you'll be as pleased as we are that more than €300 million a year of our taxes will continue to be spanked on producing a crop which killed over 500,000 people in Europe last year.

In the perverse world that is the EU, farmers are paid £5,250 a hectare to grow tobacco while wheat farmers receive £240 a hectare.

In the UK alone the NHS spends £1.5bn a year treating people with smoking related diseases and the government spends around £30m on anti-smoking education campaigns and £40m is spent helping people stop smoking. No contradictions there then...

Last year the Government claimed the EU had seen the light and that tobacco subsidies would end in 2010, but the clowns in the European Parliament have just voted to extend tobacco farmer's gravy train until at least 2012.

The issue will now go to an agriculutural ministers meeting where no doubt the UK Government will defend our interests admirably (remember that root-and-branch review of the CAP that Blair promised us in return for our rebate anybody?)

Other news just in which helps to confirm that Brussels really is on another planet: today is the launch of European Maritime Day which "will highlight the importance of the oceans and seas to Europe". This from the organisation which has admitted that its very own Common Fisheries Policy is "morally wrong" and is single handedly responsible for destroying some of the richest fishing stocks in the world?

Apparently this great day is going to be a celebrated with a "stakeholders conference" in Brussels. Hurrah! Cohibas all round...

Thursday, May 08, 2008

Space constraints prevent me from repeating the many positives Britain has derived from enlargement that were aired at yesterday's "Business for New Europe" conference, but here's an interesting thought from one of the speakers, Lucy Neville-Rolfe, the corporate and legal affairs director at Tesco.

Just as the influx of Poles and other Eastern European workers helped fill shortages in the labour force during the upswing, they are now acting as a useful shock absorber for the labour market as the economy slows, with many deciding to return home to the higher growth eco-nomies from which they came. With luck, it may mean Britain can survive more difficult times without the usual, steep rise in unemployment.

Er... doesn't this kind of contradict the Governments previous argument that migration from eastern Europe doesn't cause unemployment? If people going home would "create" jobs then doesn't that rather suggest that them turning up probably "takes" jobs away from people here? You can't have it both ways.

Obviously if a lot of people turn up in a short space of time that is likely to create some frictional unemployment, but with a flexible economy that should clear pretty quickly. There is not a set number of jobs in the UK economy. Indeed, most migrants come here to do a specific job.

Post migration the labour market will clear with a slightly lower wage rate for unskilled workers who face more competition. The government have never really faced up to that. On the one hand the Government want to say that it increased migration hasn't reduced wages. On the other hand they say migration has “held down inflation”. Again - which is it to be?

One duff argument in the migration debate is that we "need" immigration so that immigrants will do the jobs that people in Britain won't do. This is nonsense. The UK has 7 million economically inactive people, and with a flexible economy wages will rise to the point where people will do the job. Are Brits too good to clean the bog, or take out the bins, or work on a farm? Are these jobs “only fit for Poles”? It’s a pretty dodgy argument that would probably sit better in the rhetoric of the hard right, than the liberal eeejuts that normally make this argument.

The bottom line is that the answer to unemployment is a flexible economy. The answer to low wages is to transform our utterly useless education system.

There is an argument that says migration is good because its a stealthy way to make the economy more flexible. But this is fundamentally bad politics because (a) making the economy more flexible by stealth through immigration is likely to be unpopular in the long term and (b) it discourages real reform - why sort out education or labour market regulation if we can just import skills, and circumvent labour market rules. NB India are desperately trying to phase out their "informal sector" - are we seriously trying to create one in the UK?

In the long run the growth of the economy is all about productivity and the accumulation of knowledge. It is pretty clear which policies promote growth (low tax, low regulation, effective public spending) and the real challenge is for politicians to pursue these goals in a gutsy way.

Migration probably has a marginal impact either way (and all EU migration is only a third of the total anyway). GDP per capita is probably initially lower because the same capital and land stock is divided among more people, and the people arriving are not that highly skilled or wealthy. On the other hand they are clearly entrepreneurial enough to move countries and probably working more hours than the average person in the UK.

Jeremy Warner thinks both it was great that people from the A8 came to the UK, and also it's just great that they are now going away (are they? - no-one knows). The truth, as the Lords recently pointed out, is that neither will really make much difference.